The Hidden-in-Plain-Sight Mechanism of the Super-Wealthy: Money-Laundering 2.0

Financial and political power are two sides of one coin.
We all know the rich are getting richer, and the super-rich are getting super-richer. This reality is illustrated in the chart of income gains, the vast majority of which have flowed to the top .01%–not the top 1%, or the top .1% — to the very tippy top of the wealth-power pyramid:
Though all sorts of reasons have been offered to explain this trend–I’ve described the mechanisms of financialization here for years–two that don’t attract much mainstream media attention are money laundering and control fraud, i.e. changing the rules of what’s legal so what was illegal yesterday is legal today–presto-magico, illegally skimmed wealth is now “legal.”
Correspondent JD recently submitted an excellent summary of the progression from Money Laundering 1.0 to Money Laundering 2.0:
Money laundering 1.0 is making dirty money legal, control fraud is manipulating the ‘legal’ options, and money laundering 2.0 is making sure that ‘legal’ fortunes are not taxed and cannot be clawed back.”
Conventional money laundering works by shifting ill-gotten gains into legitimate banks and/or assets. Ill-gotten gains can be laundered quite easily by buying homes or businesses (in the U. S., Europe, etc.) with cash. The home or enterprises can then be sold and the net is now legit.

This post was published at Charles Hugh Smith on DECEMBER 29, 2017.

What Happens When A Russiagate Skeptic Debates A Professional Russiagater

Authored by Caitlin Johnstone via Medium.com,
Have you ever wondered why mainstream media outlets, despite being so fond of dramatic panel debates on other hot-button issues, never have critics of the Russiagate narrative on to debate those who advance it? Well, in a recent Real News interview we received an extremely clear answer to that question, and it was so epic it deserves its own article.
Real News host and producer Aaron Mat has recently emerged as one of the most articulate critics of the establishment Russia narrative and the Trump-Russia conspiracy theory, and has published in The Nation some of the clearest arguments against both that I’ve yet seen. Luke Harding is a journalist for The Guardian where he has been writing prolifically in promotion of the Russiagate narrative, and is the author of New York Times bestseller Collusion: Secret Meetings, Dirty Money, and How Russia Helped Donald Trump Win.
In theory, it would be hard to find two journalists more qualified to debate each side of this important issue. In practice, it was a one-sided thrashing that The Intercept’s Jeremy Scahill accurately described as ‘brutal’.
The term Gish gallop, named after a Young Earth creationist who was notoriously fond of employing it, refers to a fallacious debate tactic in which a bunch of individually weak arguments are strung together in rapid-fire succession in order to create the illusion of a solid argument and overwhelm the opposition’s ability to refute them all in the time allotted. Throughout the discussion the Gish gallop appeared to be the only tool that Luke Harding brought to the table, firing out a deluge of feeble and unsubstantiated arguments only to be stopped over and over again by Mat who kept pointing out when Harding was making a false or fallacious claim.


This post was published at Zero Hedge on Thu, 12/28/2017 –.

Goodbye, Net Neutrality. Hello, Liberty.

The New York Times has published a screed with this title: The Internet Is Dying. Repealing Net Neutrality Hastens That Death.
Let me remind you of the basic rule of titling breathless articles: begin with the phrase “the death of” or “the end of.” When you read such a phrase, you can be sure that whatever it is, it is not dying. Whatever it has been in the past, it is likely to be in the future. It is not facing the end.
Here is the logic of the screed.
The internet is dying. Sure, technically, the internet still works. Pull up Facebook on your phone and you will still see your second cousin’s baby pictures. But that isn’t really the internet. It’s not the open, anyone-can-build-it network of the 1990s and early 2000s, the product of technologies created over decades through government funding and academic research, the network that helped undo Microsoft’s stranglehold on the tech business and gave us upstarts like Amazon, Google, Facebook and Netflix.
Nope, that freewheeling internet has been dying a slow death – and a vote next month by the Federal Communications Commission to undo net neutrality would be the final pillow in its face.
Net neutrality is intended to prevent companies that provide internet service from offering preferential treatment to certain content over their lines. The rules prevent, for instance, AT&T from charging a fee to companies that want to stream high-definition videos to people.
The phrase “preferential treatment” is easy to define: high bid wins. It is the organizational principle of the auction.
The mainstream media are Keynesian to the core. The fundamental principle of the free market is this: high monetary bid wins. It is the principle of the auction. Liberals hate most auctions. Yes, they like auctions of incredibly overpriced and incomparably ugly art. They don’t get upset when somebody pays $150 million to buy a piece of tripe painted by Picasso. That’s their kind of stupidity. They like it. But they don’t want the common people to have access to open markets. Open markets are only for the elite, in the view of America’s Left.

This post was published at Gary North on November 30, 2017.

Here’s The Chart That Everyone Is Talking About (And Hoping Is Not ‘Real’)

While mainstream media eyes have been focused on wrecked tech stocks and towering trannies, professionals in the world’s largest liquidity markets have been shocked at the sudden explosion in one chart… that most everyone is hoping is not ‘real’.
With central banks puking money at low or negative rates to anyone who can fog a mirror, the sudden spike in EONIA, or overnight money rates in Europe, which we first highlighted yesterday, is quite a shock in a normally stable market.
EONIA has spiked from -36bps to -24bps in the last 2 days and the authority that ‘manages’ this index has verified this is not a ‘fat finger’.
Traders everywhere are scratching their heads – here’s why:
Bloomberg explains that EONIA is not a posted rate where banks would like to do business, such as Libor, but a weighted average index of actual trading in unsecured overnight money.

This post was published at Zero Hedge on Dec 1, 2017.

Venezuela Defaults On A Debt Payment – Is This The First Domino To Fall?

Did you know that Venezuela just went into default? This should be an absolutely enormous story, but the mainstream media is being very quiet about it. Wall Street and other major financial centers around the globe could potentially be facing hundreds of millions of dollars in losses, and the ripple effects could be felt for years to come. Sovereign nations are not supposed to ever default on debt payments, and so this is a very rare occurrence indeed. I have been writing about Venezuela for years, and now the crisis that has been raging in that nation threatens to escalate to an entirely new level.
Things are already so bad in Venezuela that people have been eating dogs, cats and zoo animals, but now that Venezuela has officially defaulted, there will be no more loans from the rest of the world and the desperation will grow even deeper…
Venezuela, a nation spiraling into a humanitarian crisis, has missed a debt payment. It could soon face grim consequences.
The South American country defaulted on its debt, according to a statement issued Monday night by S&P Global Ratings. The agency said the 30-day grace period had expired for a payment that was due in October.
A debt default risks setting off a dangerous series of events that could exacerbate Venezuela’s food and medical shortages.
So what might that ‘dangerous series of events’ look like?
Well, Venezuela already has another 420 million dollars of debt payments that are overdue. Investors around the world are facing absolutely catastrophic losses, and the legal wrangling over this crisis could take many years to resolve. The following comes from Forbes…

This post was published at The Economic Collapse Blog on November 14th, 2017.

U.S. SHALE OIL PRODUCTION UPDATE: Financial Carnage Continues To Gut Industry

As the Mainstream media reports about the next phase of the glorious U. S. Shale Oil Revolution, the financial carnage continues to gut the industry deep down inside the entrails of its horizontal laterals. The stench of fracking fluid must be driving shale oil advocates utterly insane as they are no longer able to see financial wreckage taking place in these companies quarterly reports.
This weekend, one of my readers sent me the following Bloomberg 45 minute TV special titled, The Next Shale Revolution. If you are in need of a good laugh, I highly recommend watching part of the video. At the beginning of the video, it starts off with President Trump stating that the U. S. has become an energy exporter for the first time ever. Trump goes on to say, ‘that powered by new innovation and technology, we are now on the cusp of a new energy revolution.’ While I have to applaud Trump’s efforts for putting out some positive and reassuring news, I wonder who is providing him with terribly inaccurate energy information.
I would kindly like to remind the reader, the United States is still a NET IMPORTER of oil. We still import nearly six million barrels of oil per day, but we export some finished products and a percentage of our shale oil production. Thus, we still import a net of approximately three million barrels per day of oil.
A few minutes into the Bloomberg video, both Pioneer Resources Chairman, Scott Sheffield, and Continental Resources CEO, Harold Hamm, explain how advanced technology will revolutionize the shale oil industry and bring down costs. I find that statement quite hilarious as Continental Resources and Pioneer continue to spend more money drilling for oil and gas then they make from their operations. As I stated in a previous article, Continental Resources long-term debt ballooned from $165 million in 2007 to $6.5 billion currently. So, how did advanced technology lower costs when Continental now has accumulated debt up to its eyeballs?

This post was published at SRSrocco Report on November 14, 2017.

The Economics Definition of Sanity: Keep Doing The Same Thing Over and Over Because It Has To Work One of These Times

We live in an age of statistics. They are everywhere, including a whole lot of junk numbers (endless studies) that don’t pass minimum scrutiny. Somehow, statistics have become the gold standard for at least the mainstream media in framing our view of everything from new discoveries to further exploration into how things work.
That’s fine for a discipline like quantum physics where the utterly complex probability models have been repeatedly tested and validated. It’s a far different proposition in the softer sciences where the rules of science aren’t as easily determined.
In 1972, Karl Popper in further defining the scientific process in this modernizing age said that,
Whenever a theory appears to you as the only possible one, take this as a sign that you have neither understood the theory nor the problem which it was intended to solve.
It’s a warning that I try to take to heart, seeing as I do eurodollars lurking ominously behind every global problem. But Popper also said at the same time, ‘no rational argument will have a rational effect on a man who does not want to adopt a rational attitude.’ In other words, as long as I stick to a broad enough survey of evidence then proceeding as I do on the monetary explanation for at least economic deficiencies is a legitimate, rational inquiry.

This post was published at Wall Street Examiner on November 7, 2017.

78 Percent Of U.S. Workers Are Living ‘Paycheck To Paycheck’ And 71 Percent Of Them Are In Debt

Are you living paycheck to paycheck? Is so, you are just like most other hard working Americans. As you will see below, 78 percent of full-time workers in the United States say that they are living paycheck to paycheck. That is the highest figure ever recorded, and it is yet more evidence that the middle class is under an increasing amount of stress. The cost of living is rising at a much faster pace than our paychecks are, and more families are falling out of the middle class with each passing month. Unfortunately, this is something that the mainstream media really doesn’t want to talk about these days. Instead, they just keep having us focus on the soaring financial markets which are being grossly artificially inflated by global central banks.
When I came across the numbers that I am about to share with you I was actually quite stunned. I knew that things were not great in ‘the real economy’, but I didn’t expect that the number of Americans living paycheck to paycheck would actually be rising. But that is precisely what a brand new survey that was just released by CareerBuilder is saying…
Seventy-eight percent of full-time workers said they live paycheck to paycheck, up from 75 percent last year, according to a recent report from CareerBuilder.
Overall, 71 percent of all U. S. workers said they’re now in debt, up from 68 percent a year ago, CareerBuilder said.
While 46 percent said their debt is manageable, 56 percent said they were in over their heads. About 56 percent also save $100 or less each month, according to CareerBuilder.

This post was published at The Economic Collapse Blog on November 1st, 2017.

Do Shifting Democrat Talking Points Confirm That “Trump Is Unlikely To Be Implicated” In Russia Probe?

Over the past several weeks, the Russia-related talking points of Democrats and their mainstream media echo chambers have shifted from constantly insisting that Trump colluded with Russia during the 2016 election to focus on a seemingly irrelevant amount of advertising dollars that may have been spent on various social media platforms by people that “may have been connected” to the Kremlin…which, to our understanding, is defined as anyone with their browser language set to Russian.
Alas, as the Washington Examiner points out today, this shift in talking points could finally indicate that Democrats are admitting that there is no ‘there’ there when it comes to the ‘Trump collusion’ narrative.

This post was published at Zero Hedge on Oct 23, 2017.

Marc Faber Responds To Racism Accusations

Having been forced off the boards of Sprott, NovaGold, and Ivanhoe mines and excommunicated from mainstream business media following his comments earlier in the week, Gloom, Boom, & Doom Report writer Marc Faber responds to his racism allegations…
“I have been labeled by the mainstream media as a racist – I don’t think this corresponds at all with reality.
I wrote a report about capitalism and socialism and about private property rights, and I also wrote about the tendency nowadays to want to rewrite history.
In the US they are trying to tear down statues of people who had a different view from other people at the time… they also tried to tear down statues of Columbus..

This post was published at Zero Hedge on Oct 20, 2017.

No Vol And No Volume – Even The WSJ Questions Equity Melt-Up

It’s encouraging to see that one mainstream media outlet questioning the recent market melt-up which wasn’t just notable for the lack of volatility, but also a severe lack of volume. The new normal seems to be ‘No vol and no volume’, although we saw a bit of a regime shift today, before the normal reversal.
The WSJ noted today that ‘Stocks continue to hit record highs, yet those pushing them there are trading less and less. The number of stocks and exchange-traded products changing hands in the U. S. and Europe has fallen steadily in recent months as ultralow volatility, a lack of market-moving news and the rising popularity of passive investment funds have kept many investors on the sidelines.’
The chart below of trading volume in both regions is ugly, to say the least, especially in Europe where it’s the lowest in five years. Aggregated trading volume for NYSE, NYSE American, NYSE Arca and the NASDAQ this month is reported to be down 12% versus the average for the year and 22% below last year’s average. It’s become so bad that even ETF trading is 8.5% below last year.

This post was published at Zero Hedge on Oct 19, 2017.

Russia Stockpiles Gold To Prevent A Currency Attack By The U.S.

‘Countries stockpile gold for strategic and defensive reasons – for instance, in case relations between nations are damaged and their currencies lose their value,’ Gabriel Rubinstein, a financial consultant and former representative of the Argentine Central Bank (source link is below)
Russia has been accumulating a significant gold reserve for over a decade, along with China and most if not all of the BRIC/SCO/Silk Road countries. This is a fact that has been either unnoticed or intentionally ignored by the western mainstream media. Of course, gold is a barbarous relic that just ‘sits there and does nothing’ (Warren Buffet).

This post was published at Investment Research Dynamics on October 17, 2017.

Robert Gore’s “Hard Core Doom Porn”

It will be a crash like we’ve never seen before.
***
SLL has been accused of trafficking in ‘doom porn.’ Guilty as charged. If you don’t like doom porn, don’t read this article, it’s hard core. If you prefer feel good and heartwarming, there are plenty of Wall Street research reports and mainstream media stories about the economy available. Enjoy!
In 1971, President Nixon closed the ‘gold window,’ which allowed foreign governments to exchange their dollars for gold. This severed the last link between any government and central bank-created debt and the real economy. Debt could be conjured at whim, and governments and central banks have done so for the last 46 years.
Not surprisingly, credit creation without restraint has papered the globe with the greatest pile of debt mankind has ever amassed, measured in nominal terms or relative to the underlying economy. A measure of how extraordinary this situation is: most people regard it as normal, if they think of it all. Debt is a first mover, a financial constant. Any exigency small or large can be met from an unlimited credit pool that will always be with us. How to rebuild Houston, Florida, and Puerto Rico? No problem, borrow.
Although fiat credit creation by governments and central banks is unconnected to the real economy, its effects are not. Their debt becomes an asset within the financial system. Through fractional reserve banking, securitization, and derivatives it become the basis for a multiplication of the original debt. That multiplication is many times the multiplier (the reciprocal of the reserve requirement) taught in introductory macroeconomics classes whereby the debt is contained within the banking system.

This post was published at Zero Hedge on Oct 12, 2017.

The NFL Is Now The Least Popular Professional Sports League In America

While mainstream media outlets like the New York Times have continued to assert that the dip in NFL ratings that began last season is in no way connected to the controversy surrounding players kneeling during the National Anthem, yet another poll has reaffirmed what many football fans have suspected for weeks: The protests have transformed the NFL into the least popular professional sports league in America.
From the end of August to the end of September, the favorable ratings for the NFL have dropped from 57% to 44%, and it has the highest unfavorable rating – 40 percent – of any big sport, according to the Winston Group survey provided exclusively to Secrets.
Worse for football, which was already seeing lower TV ratings and empty stadium seats, the month of protests and calls from President Trump for fans to boycott the league or ‘walk out’ of games if they see players taking a knee has apparently turned off men aged 34-54 – one of the league’s most important demographics and a troubling sign that the league isn’t in touch with its fans. The Winston Poll from the Washington-based Winston Group found that the attitude of those fans went from an August rating of 73 percent favorable and 19 percent unfavorable to 42 percent favorable and 47 percent unfavorable, a remarkable turn against the sport.

This post was published at Zero Hedge on Oct 8, 2017.

Economic Slowdown Confirmed: The U.S. Economy Lost Jobs Last Month For The First Time In 7 Years

Don’t worry – even though the employment numbers are terrible the mainstream media insists that everything is going to be wonderful for the U. S. economy in the months ahead. According to the Bureau of Labor Statistics, the U. S. economy lost 33,000 jobs during September. That was the first monthly decline in seven years, and as you will see below, overall 2017 is on pace for the slowest employment growth in at least five years. But the Bureau of Labor Statistics insists that the downturn in September was due to the chaos caused by Hurricane Harvey and Hurricane Irma, and they are assuring us that happier times are right around the corner.
Economists were projecting that we would see an increase of around 80,000 jobs last month, and we need to add at least 150,000 jobs each month just to keep up with population growth. So the -33,000 number was a huge disappointment.
But even though we lost 33,000 jobs last month, the Bureau of Labor Statistics says that the unemployment rate fell from 4.4 percent to 4.2 percent.
Yes, I know that doesn’t make any sense at all, but that is what they are telling us.
Perhaps if several volcanoes go off inside this country, terrorists detonate a dirty bomb in one of our major cities and Godzilla invades the west coast next month the unemployment rate will drop all the way to zero.
Of course I am being facetious, but I just want to point out the absurdity of what we are being told. There is no way in the world that the official unemployment rate should be at ‘a new 16-year low’.

This post was published at The Economic Collapse Blog on October 6th, 2017.

Migration of the Tax Donkeys

Dear local leadership: here’s the formula for long-term success.
A Great Migration of the Tax Donkeys is underway, still very much under the radar of the mainstream media and conventional economists. If you are confident no such migration of those who pay the bulk of the taxes could ever occur, please consider the long-term ramifications of these two articles: Stanford Says Soaring Public Pension Costs Devastating Budgets For Education And Social Services Which American Cities Will File Bankruptcy Next? Allow me to summarize for those who aren’t too squeamish: a lot of cities and counties are going to go broke, slashing services and jacking up taxes, all to no avail. The promises made by corrupt politicos cannot possibly be kept, despite constant assurances to the contrary, and those expecting services and taxes to remain untouched will be shocked by the massive cuts in services and the equally massive tax increases that will be imposed in a misguided effort to “save” politically powerful constituencies and fiefdoms. These dynamics will power a Great Migration of the Tax Donkeys from failing cities, counties and states to more frugal, well-managed and small business-friendly locales. I’ve sketched out the migration in this graphic: the move by those who can from incompetently managed and/or corrupt cities/counties/states to more innovative, open, frugal and better managed locales.

This post was published at Charles Hugh Smith on THURSDAY, OCTOBER 05, 2017.

Exposing The Slimy Business Of ‘Russia-Gate’ (What The Mainstream Media Doesn’t Want You To Know)

As the U. S. government doles out tens of millions of dollars to ‘combat Russian propaganda’, one result is a slew of new ‘studies’ by ‘scholars’ and ‘researchers’ auditioning for the loot…
***
The ‘Field of Dreams’ slogan for America’s NGOs should be: ‘If you pay for it, we will come.’
And right now, tens of millions of dollars are flowing to non-governmental organizations if they will buttress the thesis of Russian ‘meddling’ in the U. S. democratic process no matter how sloppy the ‘research’ or how absurd the ‘findings.’

This post was published at Zero Hedge on Sep 29, 2017.

In Marketing and in Markets, Don’t be the Mark!

I have made countless posts lampooning the mainstream media and its eyeball harvesting, click baiting content. This content and especially the associated headlines (let’s recall the classic R. I. P. Bond Bull Market as Charts Say Last Gasps Have Been Taken, dated Dec. 2016 as but one example) are designed to whip up emotions, draw attention and thereby gain traffic and ad dollars (diminishing though they are these days). nftrh.com is and always will be ad-free, by the way.
So sure, the bond bull market may well have ended in the Brexit and NIRP dominated summer of anxiety (in fact I believe it did), but any good contrarian would have seen the trade setup to go bearish on bonds in the middle of that hysteria, not a half a year later when Bloomberg used Louis Yamada’s chart to make a big headline. From a post in June 2016 about the Silver/Gold ratio and the prospects for a future ‘inflation trade’ right at the height of the bond bull…
‘All of this as the world sits in Treasury bonds and global NIRP garbage. Perfect. More and more it is looking like Brexit may have been an exclamation point.’

This post was published at GoldSeek on Sunday, 24 September 2017.

Loving Our Debt-Serfdom: Our Neofeudal Status Quo

Democracy (i.e. political influence) and ownership of productive assets are the exclusive domains of the New Aristocracy. I have often used the words neoliberal, neocolonial and neofeudal to describe our socio-economic-political status quo. Here are my shorthand descriptions of each term: 1. Neoliberal: the commoditization / financialization of every asset, input (such as labor) and output of the economy; the privatization of the public commons, and the maximizing of private profits while costs and losses are socialized, i.e. transferred to the taxpayers. 2. Neocolonial: the exploitation of the domestic populace using the same debt-servitude model used to subjugate, control and extract profits from overseas populations. 3. Neofeudal: the indenturing of the workforce via debt and financial repression to a new Aristocracy; the disempowerment of the workforce into powerless debt-serfs. Neofeudalism is a subtle control structure that is invisible to those who buy into the Mainstream Media portrayal of our society and economy. This portrayal includes an apparent contradiction: America is a meritocracy–the best and brightest rise to the top, if they have pluck and work hard– and America is all about identity politics: whomever doesn’t make it is a victim of bias.

This post was published at Charles Hugh Smith on WEDNESDAY, SEPTEMBER 20, 2017.

Holy Moly, Now Wells Fargo Recommends a Credit Freeze in Equifax Hack

Third largest US bank reaches out to its customers. A mass credit freeze would have a huge impact.
No one knows yet how the Equifax hack – during which Social Security numbers, birth dates, addresses and, ‘in some instances,’ driver’s license numbers of 143 million consumers had been stolen – will wash out for Equifax, or for the other credit bureaus.
But it increasingly looks like a far bigger and broader mess not only for the credit bureaus but for the overall consumer-based US economy whose grease is easy and often instant consumer credit.
People are trying to put a credit freeze on their data at the three major credit bureaus to protect themselves from identity theft. Victims of identity theft get caught in years of a Kafkaesque nightmare where debt collectors hound them for debts incurred in their name by someone else.
A credit freeze is the best protection against identity theft. It has now been recommended by State Attorneys General, the US Government, the biggest mainstream media outlets, and numerous other outfits including from the first moment on – the evening of September 7 when the hack was disclosed – my humble site. In over 400 comments on my three articles (here, here, and here), readers have shared tips and frustrating experiences trying to deal with overloaded websites that crashed, sent people in wrong directions, or failed in other ways to produce results.

This post was published at Wolf Street on Sep 17, 2017.